House and Senate negotiators have crafted a final fiscal year 2018 defense authorization bill that blows past statutory budget caps by nearly $80 billion and continues the Capitol Hill trend of reforming Pentagon acquisition and bureaucracy.

New defense policy bill breaks spending caps by nearly $80B

House and Senate negotiators have crafted a final fiscal year 2018 defense authorization bill that blows past statutory budget caps by nearly $80 billion and continues the Capitol Hill trend of reforming Pentagon acquisition and bureaucracy.

The 2011 Budget Control Act, however, caps base defense spending at $549 billion in 2018, and Republican and Democratic appropriators have yet to reach a compromise on a final appropriations package. All OCO spending is exempt from the BCA cap.

The bill includes $20.6 billion for the Energy Department. Staffers noted other committees have jurisdiction over approximately $8 billion in base defense spending that has been authorized, but not included in the defense policy bill. The Trump administration, meanwhile, has requested $603 billion in total base defense funds for 2018.

The bill would increase the Army's active end strength by 7,500 above FY-17 enacted levels, the Guard's by 500 and the Reserve's by 500. The Navy would see an active servicemember increase of 4,000 and 1,000 for its reserve. The Air Force active service would be boosted by 4,100, the Guard by 900 and its reserve by 800. The Marine Corps' active service total would be boosted by 1,000.

Asked how realistic the total $692 billion topline is given the BCA and ongoing partisan debate, a House staffer said conversations seeking a "global agreement" continue between authorizers, appropriators and party leadership.

Staffers said a final conference report on the bill will be released Thursday, but provided reporters details on several key measures, some of which previously spurred Defense Secretary Jim Mattis to send the lawmakers a "heartburn letter" on specific concerns.

Space Corps

The bill does not include the creation of a new Space Corps, which was one of the House's most controversial proposals, but does create a new career path for space based on the Navy's nuclear reactor service. Mattis opposed the creation of the Space Corps.

The proposal, which originated in the House, drew criticism because of Amazon's perceived dominance in e-commerce.

"People are forgetting our target audience . . . it is more than just Amazon that have e-commerce portals," a House staffer said.

The staffer noted the E-commerce provision will be administered by the Government Services Administration and, thanks to input from other committees, will be government-wide.

"While it starts immediately, we have added robust implementation procedures, milestones, things like that to make sure the program stays on track," the staffer said. "This is a new option, it is not replacing existing options. Right now, DOD . . . can go through the GSA schedules and now they have this option."

The staffer said the bill was also able to "maintain and advance reforms" in defense contracting auditing and services contracting initially proposed by House Armed Services Committee Chairman Mac Thornberry (R-TX).

A provision in the bill would begin a pilot program requiring losing bid protesters who meet a "certain revenue threshold" to pay DOD's expenses for managing the protest. The provision will have a three-year phase-in period, one House staffer said. An initial draft of the measure would have required losing bid protestors to cover costs incurred by the Government Accountability Office in deciding the protest.

A Senate proposal to shorten the GAO bid protest decision timeline from 100 days to 65 days was stricken from the final bill.

DOD's new No. 3

Lawmakers who negotiated the final bill also debated a Senate provision to establish the newly created position of chief management officer as DOD's No. 3 official. Mattis opposed the measure, calling it "premature" since it came on the heels of a major acquisition system shake-up mandated by the last defense authorization bill.

"We heard the concerns from DOD and worked with the department through the process," a Senate staffer said. "The chief management officer provision is in the bill with some modifications. The provisions remain in the bill. The heartburn letter was generally expressing the desire to be able to work through a transition."

Weapon systems

The bill authorizes: a seven-year multiyear contract for the V-22 Osprey program, purchasing of 90 F-35 Joint Strike Fighters across the military and buying of three Littoral Combat Ships and 24 Super Hornets. The bill also authorizes $400 million to procure light attack aircraft.

The Trump administration requested authority to purchase eight ships in the Navy's shipbuilding budget, but the bill authorizes 13.

Cyber

The legislation directs DOD to conduct a Cyber Posture Review, though staffers did not provide further details. The Pentagon is in the midst of several posture reviews, including ones focused on overall strategy, nuclear capabilities and ballistic missile defense.

The bill also requires DOD to produce strategies for Iraq, Afghanistan, Syria and Yemen.